Article published January 01, 2009
Amway hopes marketing will help it continue comeback in U.S.
Company President Doug DeVos, left, and Chairman Steve Van Andel are the sons of the men who founded Amway in 1959.
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ASSOCIATED PRESS
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ASSOCIATED PRESS
ADA, Mich. - Once a household name and reputedly the key to great fortune for modern salesmen hoping to live out a Horatio Algerlike myth, the Amway brand faded from the American market years ago, tarnished by legal and regulatory problems.
The direct-seller of everything from health and beauty items to household cleaners repeatedly fought allegations that it was a pyramid scheme. The company also paid $20 million in fines in a Canadian criminal fraud case in 1983.
In 2000, after Amway become part of an umbrella company called Alticor Inc., the Amway name was dropped in the United States and Canada. The hope was that the company could emerge wholly remade in the world of online sales under a new moniker: Quixtar.
Now, as Amway's 50th anniversary approaches in May, Alticor is retiring the inert Quixtar label and pouring millions of dollars into reviving the Amway brand in North America with market research, national television commercials, and ads in newspapers and magazines and online. The company will use a transitional name, Amway Global, before reverting in about a year to Amway.
"We thought, well, if we're going to build a brand, build the brand that everybody knows already," Alticor president and co-CEO Doug DeVos said. "It's going to be much more successful and cost a lot less and happen a lot faster."
Despite predictions of continuing economic gloom, Alticor executives hope to repeat in the United States the kind of growth they've seen abroad in the past - and to revive the mystique that helped the company spread throughout the Midwest and, by the mid-1960s, the rest of the U.S. Amway's hundreds of thousands of distributors dreamed of getting rich by selling cleaning products and by recruiting their acquaintances to join the fold.Still operating on that basic model, including prices that tend to be higher than those of their competitors, Amway saw global sales revenue top $7.1 billion in fiscal 2007. The company predicts another $1 billion increase this year. And most of its recent growth - in such developing Asian markets as China, India, and Russia - has been under the Amway name.
The company is gambling that consumers at home, where sales have been flat for years, will remember the days when Amway was known less for scandal and more for unrelenting pitches from well-scrubbed and optimistic door-to-door salesmen.
When it was founded in 1959, Amway focused at first on household cleaners, then expanded its product line in the 1970s to include more nutritional products and, a decade later, more cosmetics. The company manufactures all its own products.
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